AT&T is planning hundreds of layoffs at HBO, Warner Bros., and different elements of WarnerMedia as a part of a plan to chop prices by as much as 20 %, The Wall Avenue Journal reported yesterday.
WarnerMedia is what was once referred to as Time Warner Inc. earlier than AT&T purchased the entertainment company in 2018. Layoffs and price cuts are nothing new at AT&T in general, together with at WarnerMedia. However WarnerMedia has taken a very large hit for the reason that pandemic started. AT&T laid off about 600 people from WarnerMedia in August, a prelude to the brand new cuts revealed yesterday. The Journal wrote:
AT&T’s WarnerMedia is restructuring its workforce because it seeks to cut back prices by as a lot as 20 % because the coronavirus pandemic drains earnings from film tickets, cable subscriptions and tv advertisements, in accordance with individuals acquainted with the matter.
The overhaul, which is anticipated to start within the coming weeks, would end in hundreds of layoffs throughout Warner Bros. studios and TV channels like HBO, TBS and TNT, the individuals mentioned.
WarnerMedia had almost 30,000 staff earlier this yr. A WarnerMedia spokesperson informed Ars that “we’re not discussing or confirming any speculative numbers” concerning what number of jobs might be lower. The job reductions are a part of the restructuring that was introduced in August, the spokesperson additionally mentioned.
“Like the remainder of the leisure trade, we’ve got not been resistant to the numerous influence of the pandemic. That features an acceleration in shifting shopper habits, particularly in the way in which content material is being considered,” WarnerMedia mentioned. “We shared with our staff lately that the group might be restructured to answer these adjustments and prioritize progress alternatives, with an emphasis on direct-to-consumer. We’re within the midst of that course of and it’ll contain elevated investments in precedence areas and, sadly, reductions in others.”
Shortly after shopping for Time Warner, AT&T mentioned that HBO wanted to ramp up production of original content regardless of the community’s historical past of succeeding with a smaller, high-quality lineup of exhibits and flicks. The HBO and Turner bosses left the company amid a reorganization in 2019.
Drops in WarnerMedia income and AT&T share value
AT&T will report third-quarter earnings later this month. In its Q2 2020 earnings report, AT&T mentioned that HBO income was $1.6 billion, down 5.2 % yr over yr. Warner Bros. income was $3.3 billion, down 3.9 %. Turner income was $3 billion, down 12.4 %.
AT&T is struggling on a number of fronts. It has misplaced over 7 million TV clients since mid-2018, and its ongoing attempt to sell DirecTV has up to now introduced in bids valued at about one-third of what AT&T paid for the satellite tv for pc firm in 2015. On the broadband entrance, AT&T stopped selling DSL to new customers and laid off hundreds of community technicians instead of expanding its fiber-to-the-home community.
Because the Journal famous, “AT&T shares have fallen about 28 % this yr, lagging behind rivals like Comcast and lacking out on the inventory market’s document run.”